Bitcoin has been moving sideways in recent days, while altcoins are skyrocketing. An altseason seems to have arrived as I predicted earlier in this analysis. This trend has everything to do with the Bitcoin dominance chart, which was forming a top. Once this chart starts a downward move, it means Bitcoin will lose dominance and attention will shift to alternative coins. Today I’m revisiting this dominance chart and looking for a support that can stop this trend. More about this later.
Up or down
Before we dive into Bitcoin dominance, let’s take a look at the BTC/USD chart. The price movements of the past few days can be summarized by following one line. This line is around $34,900, and as you can see, it has played a crucial role in the price in recent weeks. First as heavy resistance, then as solid support.
The Bitcoin price is also currently dealing with this support and is still above it. Because of this you would initially say that the eyes should be focused upwards and that new heights lie ahead. This is a bit more nuanced.
Of course, as long as we remain above this level, there is certainly the possibility of an increase. But it is essential to pay attention to the price reaction when testing this support. While it is positive that the price remains above this level, the reaction after testing the support is anything but strong or explosive. We actually notice that the increase becomes smaller and smaller after each test. This often indicates the lack of strength of support and increases the likelihood that it will eventually fail.
So at the moment I am more convinced that the price will end up in a downward movement. Price levels that are important here are $34,250 and $33,700.
A local bottom for the BTC.D
Bitcoin dominance, referred to as BTC.d, has started a downward trend as predicted. At the moment the top seems to be around 54%, and a correction is now a fact.
To determine where the price can find strong support, it is important to look at previous moments in the price history where this often occurs. The importance of the Bull Market Support Band becomes clear. This indicator plays a crucial role in providing support on this chart. Many times the price has formed a bottom here.
Is it really that simple that the price will test this indicator and then continue its way up? Time will tell. What we do know is that during the correction to this Band, altcoins will outperform Bitcoin.